Violation of the Fair Trade Law involved in the case where the application of Yung Ch'u Co., Ltd. and Yuan Hsiang Warehouse Co., Ltd. to set up a express delivery zone was rejected

Chinese Taipei

Case:

Violation of the Fair Trade Law involved in the case where the application of Yung Ch'u Co., Ltd. and Yuan Hsiang Warehouse Co., Ltd. to set up a express delivery zone was rejected

Key Words:

air cargo distribution center, fair competition

Reference:

Fair Trade Commission Decision of the 261st Commission Meeting; Letter (85) Kung Yi Tzu No 5007-010.

Industry:

Other Transportation Services (6169)

Relevant Laws:

Article 9 of the Fair Trade Law

Summary:

1. It was reported that Yung Ch'u Co., Ltd. (YC) and Yuan Hsiang Warehouse Co., Ltd (YHW), both private air cargo operators, applied to the Taipei Customs Bureau on 23 February 1995 for services of customs clearance and transshipment of express delivery goods at the private air cargo distribution centers. The Taipei Customs Bureau turned down the application for the reason of short manpower. Thereafter on 10 April 1995, the Ministry of Finance (MOF) announced the "Regulations on Customs Clearance of Import and Export Express Delivery Goods," which allowed private air cargo distribution centers to set up special zones for express delivery goods and to provide 24-hour customs clearance services. By the announcement of the Regulations, the Civil Aeronautics Administration (CAA) of the Ministry of Communications and Transportation (MOTC) on 15 April and 1 December of the same year set up a "Special Zone for Export Express Delivery Goods" and a "Special Zone for Import and Export Express Delivery Goods" at the Taipei Air Cargo Terminal. The Taipei Customs Bureau stationed its personnel at these special zones to handle 24-hour customs clearance operations. As a result, private air cargo distribution centers were put into a disadvantageous position in the competition.

2. Both YC and YHW were set up pursuant to the "Rules Governing Air Cargo Terminals" for the operations of air cargo distribution. In accordance with the "Regulations on Customs Clearance of Import and Export Express Delivery Goods," they may set up special zones for the customs clearance of express delivery goods in their companies. However, it is also true that no sufficient manpower was available from the Taipei Customs Bureau to facilitate the provision of the said services. On the other hand, regardless of the fact that the Taipei Air Cargo Terminal, which is located at the CKS International Airport and under the supervision of the CAA, is a government agency, it is still deemed an enterprise under Article 2 of the Fair Trade Law because it is an entity that provides services and engages in trade. Notwithstanding the government's policy to have general air cargo processed by private air cargo distribution centers outside the terminals, the Taipei Air Cargo Terminal currently handles, in addition to general export and import goods, special customs clearance services such as express delivery and airplane-side inspections, which make the Terminal a competitor to the aforesaid two companies. However, as the airport site is not open for use and the customs only handles the clearance of the express delivery goods at the particular terminals, the Taipei Air Cargo Terminal enjoys a competitive edge in terms of location and services scope; the competitive edge results from barriers made by artificial rules and is not supported by justifiable reasons. Therefore, even though a certain government function is involved in this case, the Commission, as the competent authority of the Fair Trade Law with the duty of ensuring fair competition and promoting economy, is obligated to consult the specific agency pursuant to Article 9 of the Fair Trade Law in search of a solution.

3. As a result of consultations under "An Air Transport Agreement Between the Coordination Council for North American Affairs and the American Institute in Taiwan", the U.S. companies were allowed to provide customs clearance services for air express delivery on the airport site, and even to expand their scope of business to include other items related to air cargo processing. On the other hand, the two local companies, which were entitled to set up special zones for express delivery under the "Regulations on Customs Clearance of Import and Export Express Delivery Goods," were unreasonably forced to delay their plan and had no access to operations on the airport site. The government's long term project of establishing an "Air Cargo City" in order to solve the said problem also seems inadequate for a critical situation like this. Furthermore, although the air cargo terminals under the CAA are to be privatized in the future, YC and YHW will face even greater unfair competition if the status quo continues and no existing private air cargo distribution centers are allowed to handle express delivery business or airport-site operations. Therefore, there are real needs for the more manpower at the customs, for rules that provide fair access to airport site, and for fair competition in the air cargo market.

4. This Commission had held coordination meeting with the Council for Economic Planning and Development, the MOTC, the CAA, and the MOF. After fully exchanging views with these relevant agencies, the following conclusions were reached:

(1) With respect to the problem of short manpower at customs for private air cargo distribution centers whose applications for the establishment of a express delivery zone was rejected, the MOF is urged to coordinate with relevant authorities for a solution.

(2) The MOTC and the CAA are urged to take into account the factor of fair competition when reviewing the privatization and the access to the airport site. The above conclusions were confirmed and approved by the Commission's 264 Commission Meeting and referred to relevant agencies for implementation.

　

Summarized by Yieh, Ning
Supervised by Chen, Ming-huang

＊＊: For information of translation, click here

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